Will California Ever Adopt Real Housing Reform?

Californians could be forgiven for becoming cynical about our State Legislature’s willingness or ability to tackle the ever-worsening housing crisis. California’s rising home values, outpacing people’s ability to afford to buy or rent decent housing close to the job centers, is not a new phenomenon. But it has worsened. While our Legislature has repeatedly recognized that there is a housing crisis, nothing in the past legislative cycles has emerged that will actually stem the tide.

Could that be changing? In the current session, there are two bills sponsored by state senator Scott Wiener that are worth watching: SB 827 and SB 828. These two bills follow on Senator Wiener’s successful introduction of SB 35 last year. While SB 35 was intended to make certain types of urban infill housing “by-right,” Senator Wiener himself has recognized that SB 35 alone (with all of its qualifications and conditions) may not yield much in the way of new housing.

SB 827 is intended to encourage new higher-density housing near transit by prohibiting density restrictions (for example, local ordinances mandating only single-family homes) within a half mile of a major transit station or a quarter mile of a bus stop on a frequently serviced bus line. The idea is that new mid-rise projects of between 4 to 8 stories could generate substantial new housing production without towering over existing lower density neighborhoods that enjoy strong transit service. Of course, this bill is highly controversial, with opponents decrying it as the end of local land use control. Given the powerful forces at work in the state Capitol, it is too early to know how this bill will fare, but if passed intact, it could actually promote a surge in transit-oriented housing by removing the inherent risk that the local agency will yield to local opposition and reject these sorts of infill housing proposals.

SB 828 follows on some of the modest changes made to the Regional Housing Needs Allocation (RHNA) process in 2017. Currently, the state Department of Housing and Community Development (HCD) works with regional councils of government every few years to allocate what each local agency’s required share of the future housing need will be, sometimes referred to simply as its RHNA obligation. Historically, the power of RHNA obligations has been, to say the least, lacking. The effect has been that although cities and counties must zone enough land as residential to meet their RHNA obligations, they suffer no real consequences if they fail to actually approve the required housing on that land. The Legislature has been actively tinkering with the RHNA process over the past few years in an effort to find the balance between respecting local jurisdictions’ rights to control local land use and trying to ensure some measure of accountability for actually approving their fair share of the needed housing. This bill would require a number of changes to the RHNA process designed to avoid rewarding jurisdictions that historically under-produce housing and which command comparatively high home prices and rental rates. Of particular interest for those who have observed the role California’s coastal communities have played in the housing crisis (that is, contributing to it by being particularly stingy in approving housing), the bill would also require HCD to address the historic underproduction of housing in coastal and metropolitan communities, by completing a comprehensive audit of unmet housing needs for each region and use that data to inform future RHNA numbers.

Many of the same opponents who have been effective in the past in terms of watering down or greatly restricting the scope of housing reform efforts will be out in force to challenge these bills, so it is premature to anticipate that any real reform will materialize in 2018, but the Legislature has shown a continued appetite to propose new laws to spur housing and one of these years they might actually do it.